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the tax hike boondoggle?

Ronni Bennett at Time Goes By and I are the same age, so I’m launching this post based on what she has written about the mistaken notions many people have about income tax rates and the history thereof.

From our early youth to our early twenties, the top tax bracket ranged between 81 and 94 percent. (See here.) For most of that period, those tax rates were placed on incomes over $400,000. That level of taxation on the wealthy helped to propel us out of the vestiges of the Great Depression and into the middle class prosperity of the 1950s.

Understandably but not forgiveably, the Republicans are waging a war against President Obama’s plan to make the tax burden placed on all economic classes more fair.

It [Obama’s plan] would boost taxes on the wealthy, oil companies and other businesses while cutting Medicare and Medicaid payments to insurance companies and hospitals to make way for a $634 billion down payment on universal health care. It would also limit charitable and other tax deductions for the affluent and trim spending on government subsidies to big farms.

Predictably, Republicans complained, much as they had done during last year’s presidential campaign, that Obama was pitting the haves against the have-nots.

Here’s a reminder from Ronni Bennett’s Crabby Old Lady rant linked to above:

The rate remained around 70 percent until Ronald Reagan was elected when the rate was dropped to 28 percent for awhile. George H.W. Bush raised it to 31 percent and Clinton increased it to 39 percent. Then George W. Bush got the rate down to 35 percent in 2003, where it has remained.

The rich have been making out like bandits for half a century on the backs of working stiffs. No one is asking them to pay 91 percent and a few more percentage points isn’t going to change the lives of the rich and famous much, but it will help a bit to offset needed spending.

As President Obama has mentioned and any thinking person knows on their own, we all need to make sacrifices now, and the rich cannot be exempt.